Wednesday, January 26, 2011

'Modest' bump for minimum wage tipped

We see that John Key has indicated that it is likely that the minimum wage of $12.75 will be increased by 2 percent. 

Every year we go through the inane performance of debating what level the minimum wage should be set at. Business groups get sucked-in and advocate either the status quo or a small increase pegged to the rate of inflation while the usual pinko suspects howl that they are owed a substantial increase.

The question we should be asking is if the government should be setting a minimum wage all?

Purchasing labour is no different than buying any other product or service. If the product or service costs more - you will buy less. If it costs more to hire labour - fewer workers will be hired.

Ironically the low skilled workers that minimum wage legislation is supposed to protect are the ones that are adversely affected.

Government meddling in the trade of labour by imposing price fixing only distorts the market that can more efficiently set a price if left alone.

The numbers of relatively low skilled workforce working for motels can be severally affected by impositions on employment freedoms including minimum wage requirements. Employment legislation is an important advocacy cornerstone for any trade association and we trust our industry representatives will continue to roll-out a resemblance of opposition.

Click the "Get Widget" link below to place this widget on your website or blog!